The head of a South African securities firm says U-S corporate scandals indicate the United States has “gone astray” at a time when it should be setting an example for honesty in business. Emerging economies are closely watching how the corruption scandals are being resolved.

David Shapiro, managing director of S-G Securities in Johannesburg, describes the string of corporate scandals as “puzzling.”

He says, "We always held America in high esteem. We’ve always believed that the level of corporate governance has been something to admire. And we’ve always been great followers of American corporate, particularly those with international brand names. Yeah, it’s puzzled us."

As a result of the mismanagement, inaccurate bookkeeping and questionable stock sales, tough legislation is expected to be approved soon by the U-S Congress. It calls on the Securities and Exchange Commission to set up a board to oversee auditors of publicly traded companies. And, if necessary, discipline them. Mr. Shapiro says keeping an eye on auditors is a good idea in any country.

He says, "They’ve let us down more than anything else. By profession I am an accountant. I’m a qualified CA (certified accountant) and I understand what’s involved and what one has to do. You know, when an accountant signs off on a set of figures the power that that has and how we as investors rely on that. So, I think it’s important that these kinds of disciplines are imposed."

However, the South African securities analyst says another provision of the US legislation may not have much of an impact over the long term. It would require chief executives and financial officers of public companies to certify the accuracy of their financial reports.

Mr. Shapiro says, "I have difficulty with this one. I’m puzzled by this and I still can’t find the nuance, you know, what difference it makes whether he signs it under oath or not. Because in the past we’ve assumed that the chief executive would have looked over the accounts and they would be fairly representative. And if he doesn’t know, if something slipped through, than he hasn’t been doing his job."

Mr. Shapiro says he agrees with the term “infectious greed” that’s been used to describe US corporate scandals. However, he says the opportunity now exists for all those in business to be “more accountable to stakeholders.” He calls on the United States “to clean up its act so the rest of the world can follow.”